Communicating about Confidence: Cheap Talk with an Ambiguity-Averse Receiver
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Date
2024-08
Publication Type
Journal Article
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yes
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Abstract
An expert, who is only informed of the probability of possible states, communicates with a decision maker through cheap talk. The decision maker considers different probability distributions over states as possible and is ambiguity averse. I show that all equilibria of the game are equivalent to partitional ones and that the most informative is interim dominant for the expert. Information transmission regarding probabilities that are bad news for the decision maker is facilitated by ambiguity aversion. However, ambiguity aversion also makes information transmission impossible, whatever the preference misalignment, regarding probabilities that are good news for him.
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published
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Journal / series
Volume
16 (3)
Pages / Article No.
43 - 75
Publisher
American Economic Association
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Software
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Organisational unit
02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.